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TMI Blog1979 (11) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of Rs. 20,182 out of the sum of Rs. 40,000 paid by him to Shri Sham Nath in computing the assessee's total income ?" The assessee, Shambhu Nath and his son, Sham Nath, were running and managing the Delhi Printing Works which originally belonged to one Chandu Lal and which was being run from April 1, 1939. In 1952 the assessee and his son purchased the business and started running it as partnership concern with effect from January 1, 1953. A partnership deed was drawn up on September 12, 1953. The father was entitled to 2/3rds share in the profits and the son 1/3rd share. Under the terms of the partnership deed it was not terminable before the expiry of five years from the date of its commencement but under cl. 15 after the expiry of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, there were certain arbitration proceedings which culminated in an award of the arbitrators dated October 29, 1960. This was made a decree of court on October 31, 1960. Under the terms of the award and decree the assessee was to pay a sum of Rs. 1 lakh by instalments as mentioned in the decree to the son whereupon the son was to have no right, title or interest in the business or in its assets. The decretal amount was made a charge on the plant and machinery of the business. In pursuance of the above award the assessee paid a sum of Rs. 40,000 to his son, Sham Nath, during the previous year. Oat of this, the assessee adjusted Rs. 15,416 against the capital which stood to the credit of the account of Sham Nath in the books of the busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of dissolution of the firm. In this view of the matter the Tribunal held that the assessee was entitled to the deduction of Rs. 20,182, being 1/3rd share of profits for the period of two years ending on December 31, 1960. It is from this order of the Tribunal that the Commissioner has sought for and obtained a reference of the question which has been set out earlier. On behalf of the applicant, Commissioner of Income-tax, it is submitted that the payment made by the assessee to his son represented a payment in lieu of the acquisition by the assessee of the right, title and interest of Sham Nath in the business and that it was rightly disallowed by the ITO and the AAC. On the other hand, Mr. Anoop Sharma, appearing on behalf o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was entitled to a settlement of account and to take away his assets as well as his monies from the firm. But there was a delay in this process. Shambhu Nath claimed to be the owner of the firm while Sham Nath laid claim to certain assets of the firm as well as to certain amounts due to him during the conduct of the business. These disputes were referred to arbitration and the arbitrators awarded a sum of Rs. 1 lakh to Sham Nath. The arbitrators, however, did not give any reasons for that decision or explain on what basis the sum of Rs. 1 lakh was arrived at by them. As already stated. Sham Nath claimed several amounts from the firm and, in the absence of any other material, it would be appropriate to infer that the amount awarded to Sham Na ..... X X X X Extracts X X X X X X X X Extracts X X X X
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